The course weblog for PA5113, State and Local Public Finance, at University of Minnesota

Friday, March 13, 2009

User Charges to Finance K-12 Education

I was surprised to read in Fisher that "among all state and local governments, local school districts rely on user charges least." This goes against what I have heard anecdotally from friends and family members that are parents and/or teachers. Most parents that I've talked to feel that school districts have steadily increased user charges for auxiliary or extracurricular services like meals, transportation, athletics or after-school programs and clubs. Part of this may be due to the high visibility of user charges in K-12 schools compared to user charges in other state and local governments.

Wassmer and Fisher (2000) argue that school districts should increase user charges to "either supplement revenue or permit a tax reduction" in part because "these types of services tend to provide substantial private benefits" and "may be consumed by only a fraction of students in a school." One of the reasons that public school districts in Minnesota haven't used school fees to a greater degree is because state law prohibits public school districts from charging fees for necessary goods and services. These include instructional materials and supplies, required library books, required school activities, graduation caps and gowns, lockers, and student transportation to and from school for students that live more than two miles from the school. The argument for imposing these limits on school fees is that the state has a constitutional obligation to provide free public education to all students and therefore cannot deny students an education based on students' ability to provide books or other educational supplies needed to complete their educational requirements.

Many public school districts would not be able to offer extracurricular activities without the revenue generated from user charges. However, these charges create inequity among students and potentially lower quality education for lower income students. The positive effects of extracurricular activities such as academic clubs, music, art or athletics on educational outcomes have been well-documented. If lower income students do not have access to these activities, their education and quality of life are negatively affected. Inequities between school districts can also happen when affluent school districts are able to charge fees and spend at above-average levels compared to less wealthy districts. Check out this 2008 Information Brief from the Minnesota House of Representatives Research Department for a summary of Minnesota state law governing authorized and prohibited public school fees, the education expenses allowed under the state’s education tax deduction and credit, and an outline of student user fees in other states.

Finally, what is your experience with school fees? Do you think the use of school fees should be increased? Are school fees more acceptable than general tax increases? Are people with a "liberal or left-leaning political bias" more concerned about equity than conservatives as Fisher suggests?

4 comments:

As percentage of their revenue, fees for extracurricular and auxiliary services (community pool time, etc.) is still just a drop in the bucket for most school districts. Even when I was in high school in the early nineties, the football team sold fertilizer (yes, fertilizer) for extra funding. When I coached Forensics at my former high school a number of years later, every student had to pay an activity fee of at least $50 to participate in any extracurricular activity. Nearly every team activity also conducted at least one fund raiser (i.e. sell Happenings books). As you might expect, participation in every activity, including athletics, dropped precipitously as fees increased (it started at $50 and went up during my time coaching).

On the other hand, taxpayers in District 11 had decided that they did not want to levy their property taxes for extracurricular activities. Parents were offered the choice and they said no.

I think the answer to your question is implicitly answered by "supply side economics."

Having taught in a school district where forty percent of residents live below the poverty line, I am hesitant to support any increase in user charges. Increases in either taxes or user charges are a great burden to parents and the community at large. I think Brad got it right with "supply-side economics."